Section 37 MCA 1973 lets the court freeze or set aside dispositions made to defeat financial relief claims, with a presumption of intent if within three years.
Official text
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MCA 1973 s. 37 — United Kingdom
For the purposes of this section “ financial relief ” means relief under any of the provisions of sections 22, 23, 24, 24B, 27, 31 (except subsection (6 and 35 above, and any reference in this section to defeating a person’s claim for financial relief is a reference to preventing financial relief from being granted to that person, or to that person for the benefit of a child of the family, or reducing the amount of any financial relief which might be so granted, or frustrating or impeding the enforcement of any order which might be or has been made at his instance under any of those provisions. Where proceedings for financial relief are brought by one person against another, the court may, on the applicaton of the first-mentioned person— if it is satisfied that the other party to the proceedings is, with the intention of defeating the claim for financial relief, about to make any disposition or to transfer out of the jurisdiction or otherwise deal with any property, make such order as it thinks fit for restraining the other party from so doing or otherwise for protecting the claim; if it is satisfied that the other party has, with that intention, made a reviewable disposition and that if the disposition were set aside financial relief or different financial relief would be granted to the applicant, make an order setting aside the disposition; if it is satisfied, in a case where an order has been obtained under any of the provisions mentioned in subsection (1) above by the applicant against the other party, that the other party has, with that intention, made a reviewable disposition, make an order setting aside the disposition; and an application for the purposes of paragraph (b) above shall be made in the proceedings for the financial relief in question. Where the court makes an order under subsection (2)(b) or (c) above setting aside a disposition it shall give such consequential directions as it thinks fit for giving effect to the order (including directions requiring the making of any payments or the disposal of any property). Any disposition made by the other party to the proceedings for financial relief in question (whether before or after the commencement of those proceedings) as is reviewable disposition for the purposes of subsection (2)(b) and (c) above unless it was made for valuable consideration (other than marriage) to a person who, at the time of the disposition, acted in relation to it in good faith and without notice of any intention on the part of the other party to defeat the applicant’s claim for financial relief. Where an application is made under this section with respect to a disposition which took place less than three years before the date of the application or with respect to a disposition or other dealing with property which is about to take place and the court is satisfied— in a case falling within subsection (2)(a) or (b) above, that the disposition or other dealing would (apart from this section) have the consequence, or in a case falling within subsection (2)(c) above, that the disposition has had the consequence, of defeating the applicant’s claim for financial relief, it shall be presumed, unless the contrary is shown, that the person who disposed of or is about to dispose of or deal with the property did so or, as the case may be, is about to do so, with the intention of defeating the applicant’s claim for financial relief. In this section “ disposition ” does not include any provision contained in a will or codicil but, with that exception, includes any conveyance, assurance or gift of property of any description, whether made by an instrument or otherwise. This section does not apply to a disposition made before 1st January 1968.
Section 37 exists for the spouse who starts moving money the moment a financial application is made. Where proceedings for financial relief are brought, the court may restrain the other party from making a disposition, transferring property out of the jurisdiction or otherwise dealing with it, where satisfied that they are about to do so with the intention of defeating the claim. It may also set aside a disposition already made with that intention, either before an order is obtained or afterwards where an order is being frustrated.
Subsection (5) is the provision that makes the section usable. Where the application concerns a disposition made less than three years before the application, or one about to be made, and the court is satisfied that it would have, or has had, the consequence of defeating the claim, then it "shall be presumed, unless the contrary is shown", that the person acted with the intention of defeating the claim. The burden shifts, which is decisive in cases where intention is otherwise impossible to prove.
Subsection (4) protects genuine third parties: a disposition is not reviewable if it was made for valuable consideration, other than marriage, to a person who acted in good faith and without notice of any intention to defeat the claim. So a purchaser who bought at a proper price knowing nothing is safe; a transfer to a relative for nothing is not. "Defeating" is defined broadly in subsection (1) to include reducing the relief that might be granted and frustrating or impeding enforcement. Subsection (6) excludes provisions in a will or codicil from "disposition" but otherwise catches any conveyance, assurance or gift of property of any description.
When it applies
A spouse transferring the house into a relative's name shortly after separation.
Money moved abroad or into a company as soon as an application is issued.
A sale at an undervalue to a friend who knew what it was for.
An order already made and being frustrated by a transfer of the assets it was to be paid from.
An urgent application to freeze assets before a hearing.
What this section does not say
×It does not catch every transfer. A disposition for valuable consideration to a good faith purchaser without notice is not reviewable.
×It does not apply to wills. Subsection (6) excludes provisions in a will or codicil from the meaning of "disposition".
×It does not reverse the burden outside the three-year window. The presumption in subsection (5) applies to dispositions made less than three years before the application, or about to be made.
×It is not available before financial proceedings are brought. The power is engaged where proceedings for financial relief are brought by one person against another.
×It does not apply to dispositions made before 1 January 1968.
Worked examples
Invented situations, written to show how the wording bites. They are not real cases, not judgments and not precedent, and nothing here predicts what would happen in yours.
Illustrative example
Two months after a financial application is filed, one spouse transfers a buy-to-let property into a sibling's name for no payment and says it is no longer theirs to give.
How the wording applies
The court can set aside a disposition made with the intention of defeating a claim for financial relief, and subsection (5) is what makes the section usable: where the disposition was made less than three years before the application and would have the consequence of defeating the claim, the intention is presumed unless the contrary is shown. The fact that decides who has to prove what is therefore the date of the transfer, because inside that window the burden shifts to the person who made it.
How the parties settled it
The property is transferred back and included in the disclosure schedule, and both agree the sibling is repaid any costs actually incurred in the transfer.
Illustrative example
Assets are moved into an offshore company shortly before a first hearing. The spouse who is left behind wants them frozen before anything else disappears.
How the wording applies
Subsection (1) allows the court to restrain a party from making a disposition or transferring property out of the jurisdiction where satisfied they are about to do so with the intention of defeating the claim - a forward-looking power, not only a corrective one. The fact that has to be shown is that intention, which is why the presumption in subsection (5) and the timing of the movements relative to the application matter so much.
How the parties settled it
The parties agree an undertaking not to dispose of or charge any asset over an agreed value without seven days' written notice, backed by full disclosure of the company's accounts.
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This page reproduces the text of MCA 1973 s. 37 in force at the date shown and explains it in general terms. It is not legal advice and takes no account of the circumstances of your case, which can change the answer completely. For a live dispute, for limitation periods, and before taking any step in court, consult a qualified lawyer in England and Wales.